SEBI seeks 15 more days to complete probe into Hindenburg’s allegations on Adani group

SEBI which was supposed to submit its report on Monday, told the court that it has ‘progressed substantially’ and has completed investigating 17 out of the 24 transactions it had taken up for probe.

The Securities Exchange Board of India (SEBI) has approached the Supreme Court seeking an extension of 15 days to conclude the investigation into allegations against the Adani group made by US short-seller Hindenburg Research.

SEBI which was supposed to submit its report on Monday, told the apex court that it has ‘progressed substantially’ and has completed investigating 17 out of the 24 transactions it had taken up for probe.

Providing a breakup with regards to the stage of investigation in the seven matters, SEBI has said that it has completed the investigation on one of the matters based on the evidence that could be gathered so far and has also prepared an interim report.

It also informed the court that it has sought information from agencies and regulators in foreign jurisdictions and would determine further course of action after receiving the information. 

“Out of the six remaining- in four, investigations, examinations, findings have been crystalized, and the reports prepared consequent thereto are in the process of approval by the Competent Authority. The applicant / SEBI expects to complete the approval process in respect of the aforesaid four matters shortly and in any event before the next date of hearing, i.e., 29.08.2023.

“In the remaining two – the investigation is at an advanced stage in one and in the other matter – the interim report is under preparation based on information gathered by SEBI thus far.

“The Applicant SEBI had sought information from entities agencies/ regulators in foreign jurisdictions, etc. and upon receipt of such information, will evaluate the same vis-a-vis the interim report to determine further course of action, if any, in the said matter,” the application states. 

Taking note of the fact that SEBI is seized of the investigation into the allegations made against Adani Group companies, a bench — also comprising Justices PS Narasimha and JB Pardiwala — had on March 2 said that SEBI as a part of its ongoing investigation will further investigate whether there was a violation of Rule 19A of the Securities Contracts (Regulation) Rules 1957 and failure to disclose transactions with related parties and other relevant information which concerns related parties to SEBI in accordance with the law and any manipulation of stock prices in contravention of existing laws.

The court had, in March, directed SEBI to conclude its ongoing investigation in two months and file a status report. The court also accorded SEBI the responsibility of apprising the expert committee of the action taken and the steps taken in furtherance of its ongoing investigation. The bench had clarified that the constitution of the committee would not divest SEBI of its power in continuation of its investigation into the volatility in the securities market. 

SC had also appointed an expert committee headed by former SC judge Justice AS Sapre to examine the changes required in the regulatory framework in the wake of allegations of stock manipulation against the Adani group. The expert committee shall also consist of other members namely: OP Bhat, Justice JP Devadhar (retired), KV Kamath, Nandan Nilekani and Somashekar Sundareshan.

On May 17, Supreme Court gave SEBI time till August 14 to complete its probe.